Companies Act, 1973 (Act No. 61 of 1973)The Securities Regulation Code on Takeovers and MergersThe CodeSection J. Documents from the Offeror and the Offeree BoardRule 21. Offeror Documents |
| 21.1) | Reasons for offer and intentions regarding the directors of the offeree company |
An offeror shall furnish in the offer document its reasons for the offer and its intentions regarding the continuation of the business of the offeree company and the continuation in office of the directors of the offeree company.
| 21.2) | Financial and other information on the offeror and on the offeree company |
| a) | The offer document shall contain the following information wherever it is reasonably available about the offeree company and where the Panel so determines, about the offeror: |
| i) | For the past four financial years for which the information has been published, turnover, net profit or loss before and after taxation, the amount of tax, extraordinary items, outside shareholders' interests, the amount absorbed by dividends and earnings and dividends per share; |
| ii) | a statement of the assets and liabilities shown in the latest published audited accounts; |
| iii) | all known material changes in the financial or trading position of the company subsequent to the latest published audited accounts or a statement that there are no known material changes; |
| iv) | details relating to items referred to in paragraph (a)(i) above in respect of any interim statement or preliminary announcement made since the latest published audited accounts; |
| v) | inflation-adjusted information relating to (a)(i) and (a)(ii) if any has been published; |
| vi) | significant accounting policies together with any points from the notes to the accounts which are of major relevance to an appreciation of the figures, including those relating to inflation-adjusted information; |
| vii) | where the offeror is a company, the names of its directors and their direct and indirect interests, if any, in the offeror and offeree company; and |
| viii) | any other relevant information required by the Panel. |
| b) | The figures to be disclosed under paragraphs (a)(i) and (ii) are to be adjusted to eliminate material unusual and non-recurring items and the nature of the adjustments made shall be disclosed. |
| c) | Where, because of a change in accounting policy, figures are not comparable to a material extent, this shall be disclosed and where possible the approximate amount of the resultant variation shall be stated. |
| d) | In a highly-leveraged offer, the Panel will require that the offer document contains a description of the financing arrangements. An offer shall be considered to be highly-leveraged if, as a result of the offer, the offeror will incur a high level of debt and the payment of interest, repayments or security for the debt will substantially depend on the business of the offeree company. In cases of doubt, the Panel shall be consulted. |
| 21.3) | Holdings of securities and dealings |
| a) | The offer document shall state- |
| i) | the holdings of securities by the offeror in the offeree company; |
| ii) | the holdings of securities in the offeror (in the case of a securities exchange offer only) and in the offeree company in which each director of the offeror is directly or indirectly interested; |
| iii) | the holdings of securities by the offeror (in the case of a securities exchange offer only) and in the offeree company which any person acting in concert with the offeror owns or controls together with the name of such person acting in concert; |
| iv) | the holdings of securities in the offeror (in the case of a securities exchange offer only) and in the offeree company owned or controlled by any person who, prior to the posting of the offer document, has irrevocably committed himself to accept the offer, together with the name of such person. |
| b) | if in any of the above categories there are no holdings of securities, this fact shall be stated. This will not apply to category (a)(iv) if there are no such irrevocable commitments. |
| c) | If any party whose holdings of securities are required by this Rule to be disclosed has dealt for value in the securities in question during the period beginning 6 months prior to the offer period and ending with the latest practicable date prior to the posting of the offer document, the details, including dates and prices, shall be stated. If no such dealings have taken place this fact shall be stated. |
| 21.4) | Directors' Emoluments |
Unless an exemption is obtained from the Panel, the offer document shall state whether and in what manner the emoluments of the offeree company's directors will be affected by the acquisition of the offeree company or by any other associated transaction. If there will be no effect, this shall be stated.
| 21.5) | Special arrangements |
Unless otherwise agreed by the Panel, the offer document shall contain a statement on whether or not any agreement, arrangement or understanding (including any compensation arrangement) exists between the offeror or any person acting in concert with it and any of the directors of the offeree company or persons who were directors within the preceding 12 months, or holders of relevant securities or persons who were holders thereof within the preceding 12 months, having any connection with or dependence upon the offer, and full particulars of any such agreement, arrangement or understanding.
| 21.6) | Terms and mechanics of the offer |
The offer document shall incorporate the terms of the offer and its proposed implementation and the mechanics thereof.
| 21.7) | Cash confirmation |
Unless otherwise permitted by the Panel when the offer is for cash or includes an element of cash, the offer document shall include a statement that an irrevocable guarantee or other proof by an appropriate third party (e.g. the offeror's bank or financial adviser) has been furnished in favour of the holders of the relevant securities that resources will be available to the offeror sufficient to satisfy full acceptance of the offer. The party confirming that resources will be available will not be expected to produce the cash itself if, in giving the confirmation, it acts responsibly and has taken all reasonable steps to assure itself that the cash will be available.
| 21.8) | Ultimate owner of securities acquired |
Unless otherwise agreed by the Panel, the offer document shall contain a statement on the number of any securities acquired in pursuance of the offer which will be transferred to any other person, together with the names of the parties to any such agreement, arrangement or understanding and particulars of all securities in the offeree company held by such persons, or a statement that no such securities are held.
| 21.9) | Valuation of unlisted securities consideration |
When the offer involves the issue of unlisted securities, the offer document and any subsequent circular from the offeror shall contain an appropriate independent valuation thereof and the information required by Rule 21.2.
| 21.10) | No set-off of consideration |
Except with the consent of the Panel, the offer document shall contain a statement to the effect that settlement of the consideration to which any holder of relevant securities is entitled under the offer will be implemented in full in accordance with the terms of the offer without regard to any lien, right of
The Panel will only grant consent in exceptional circumstances and where all holders of relevant securities are to be treated similarly.
| 21.11) | Arrangements, undertakings or agreements in relation to offers |
Any arrangements with, undertakings by, or agreements between an offeror and the offeree company and persons acting in concert with either of them in relation to relevant securities to the extent that such are reasonably ascertainable shall be disclosed in the offer document. If there are none this shall be stated.